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First-Time Home Buyer Tax Credit FAQs


Q. I bought my first house in the end of 2017. Am I entitled to a refund?
A. The first-time home buyer rate reduction is retroactive, so if your purchase of real estate was subject to the current State rate (2.5% or 3% depending on your municipality) when you bought your first home, you may qualify for a refund.

Q. How do I know if I qualify for the first-time home buyer credit?
A. If you have not yet purchased your home, the attorney handling the real estate closing will help you with the forms necessary to claim the credit at closing. If you have already purchased your home, you may qualify for a refund if (a) the real estate was purchased by one or more individuals (i.e., not by a corporation or LLC); (b) the individuals who purchased the home never owned residential real estate before this purchase; and (c) the individuals occupied or intend to occupy the home within 90 days after the date on which the purchase closed.

Q. I bought a house earlier this year – how do I compute my refund?
A. The Division of Revenue has developed Form 5405 which may be used to compute and request the refund to which you may be entitled.

Q. I’ve never owned a home, but my spouse has. Do we qualify for the first-time home buyer rate reduction?
A. Unfortunately, no. The law requires that every person who purchases the property must have never owned an interest in residential real estate in the past.

Q: Do I need to submit anything with my application for a refund?
A: Please provide a copy of the closing disclosure or closing statement that was provided to you at closing. The disclosure should reflect the state transfer taxes you paid at closing. If you do not have a copy, please contact the attorney who represented you at the closing.

Q. How long will it take the Division of Revenue to process my refund?
A. We anticipate that it will take 4-6 weeks for us to process your refund request and issue the refund.

 

More Information

Do I Qualify?

Form 5405 – Claim For Refund of Realty Transfer Taxes by First Time Home Buyer
Form 5402 – Realty Transfer Tax Return and Affidavit of Gain and Value
Form 5402, Schedule 1 – First Time Home Buyer’s Credit

Contacts

Taxpayer Assistance
(302) 577-8783


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